There are multiple ways to hold a title on an investment property, and if you’re purchasing rental properties, it’s in your best interest to do your research and make an informed decision. Unfortunately, this topic is often overlooked and is widely misunderstood.
On today’s episode of Investing in Real Estate, Natali is sharing an important lesson she learned in real estate school about holding title. We’ll discuss our real life example, as well as some other interesting scenarios. We’ll discuss why this issue is so important, and how you can protect your ownership of real estate.
On this episode you’ll learn:
- What a title is, and how it works.
- What tenancy in common is.
- What joint tenancy is.
- And more!
What a Title Is, and How It Works
A title is your claim to your property. When you purchase a piece of real estate, the title company will conduct a search to ensure you can obtain a clean title. This can be an incredibly important liability issue. How the title is held in a partnership can also be imperative.
What Tenancy in Common Is
When two partners go into a deal, they are often listed as tenants in common. In this scenario, each tenant has separate ownership—usually 50/50, but any proportion can be chosen. Each tenant in common can do whatever they wish with their portion, and if partner were to pass away, their portion will be passed to their right of survivorship.
What Joint Tenancy Is
Another strategy to consider is called joint tenancy. In this instance, the owners do not divide their right to survivorship. This is typically the best choice for a married couple. In the event that a joint tenant passes away, the surviving tenant then assumes full ownership.
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DISCLAIMER: I am not a financial adviser. I only express my opinion based on my experience. Your experience may be different. These videos are for educational and inspirational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. There is no guarantee of gains or losses on investments.
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